Anxin-China Holdings Ltd., a provider of safety-monitoring services in China, agreed to buy a maker of elevator-security systems for HK$1.3 billion ($167 million) in cash to expand its range of operations.
The Hong Kong-based company will pay for Altus Technologies Ltd. in four stages, with three of the payments dependent on the target meeting performance goals, according to a filing to the city’s stock exchange yesterday evening.
“The acquisition poses a valuable opportunity for the group to expand its business to the industrial safety and public safety segment,” Anxin-China said in the statement. “Profit guarantees provide an opportunity for the group to broaden its revenue base and secure stable income from the target.”
Anxin-China’s revenue growth has been affected by delays in work-safety contract awards in China because of a probe into government corruption, Sun Hung Kai Financial wrote in a note. Still, improving industrial safety continues to be a government priority, the brokerage said.
Shares of Anxin-China fell 6.6 percent to close at HK$1.84 in Hong Kong yesterday, before the company released the filing. The stock has fallen 25 percent this year, compared with an 8.2 percent drop in the benchmark Hang Seng Index.
Altus Technologies provides elevator safety-monitoring, management, surveillance and maintenance systems, Anxin-China said. The target plans to sell advertising through monitors installed in elevators, according to the filing.
The seller is a company owned by Tony Apatan Go. China Investment Securities HK advised Anxin-China on the deal, according to the filing.